by Preetesh Sewraj (@iPreetesh) In the innovation space, imbalances are sometimes the catalysts for remarkable breakthroughs that then return the system to the ideal state until the next imbalance occurs. There is one factor, however, that may pose severe benefit and threat to a large segment of society — politics. Recently, the US swore in Donald J Trump as its 45th president. This represented one of the most polarising elections in US history. While I am far from a supporter of Trump, I am intrigued by the impact his election will have on the global innovation landscape.
Constant tug-of-war
Innovation is stimulated by both consumers’ desire for life-improving products and manufacturers’ desire to unlock greater consumer revenue. This constant tug-of-war between consumers and manufacturers results in a sweet spot where innovation thrives and great products may be found.
This scenario is the simplest form of the ideal world situation but there are times that this constant churn is disrupted. Some of the factors that force this relationship into a state of imbalance may include technological advancement, a wholly new way of delivering the end benefit and change in consumer needs. These imbalances are not necessarily negative.
Globally, the US acts as one of the greatest disruptors on the global stage. It has the ability to attract talent from around the world and constantly disrupt existing industries at various points. A total disruption of the ecosystem is unlikely, as no single company has the ability to generate mass-disruption technology and no consumer group is able to evolve needs in a relatively short period of time. In situations such as these, the innovation cycles are therefore never in sync which allows calm waves of innovation to be generated and spread over the market.
Key trends
Some key trends that I forecast include:
- Greater American innovation (albeit with higher costs and reduced volumes): Keeping money within the borders of the US will ensure that there are more jobs for innovation professionals within one of the most-innovative global economies. Despite the creation of great IP, the lack of cost-effective manufacturing opportunities will mean that most of the tech created will not be able to filter through the global supply chain. It also means that most Americans will be unlikely to afford these products, thereby relegating them to a limited number of privileged individuals who have the disposable income to pay the price premiums.
- Global innovation slowdown, particularly in China and Mexico: As China and Mexico represent two major external manufacturing hubs for the US, we may expect that the reduction of both capital and IP flow into these markets will reduce their ability to create next-tier innovation that is derivative of primary innovation techniques generated in the US. This also means that feeder economies, into Mexico and China, will suffer from the lack of capital inflow.
- Reduced potential for African innovation: As a feeder economy into China, Africa is reliant on capital inflow through the supply of raw materials to China. The Pan-African economy will therefore see less revenue for the development of transport networks that are a key requirement for high-impact innovation economies.
- Space innovation is likely to see significant leaps: Nationalist ideology from a super power such as the US is likely to spur development in glamour innovation categories. The highly contested space innovation category is likely to see greater competition as the current political regime will look to use this area as a testament to the success of its policies. Space innovation will see a resurgence it has not seen in years and will likely offer a knock-on effect in areas such as airplanes and other forms of transportation.
Key takeout
Political change is never easy and, when there is a highly disruptive change in a major economy, such as the US, we can expect that government revenue will be directed to areas that make the new administration look good while funds are diverted away from areas that impede populist agenda.
The key takeout should be that the disruption merely forges a new path for innovation that may seem contracted in the short term but is merely in a position to unleash greater innovation when political uncertainty is removed, and the freedom to innovate becomes the challenge of not just one economy but a truly global endeavor.
Preetesh Sewraj (@iPreetesh) is the CEO and chief innovation analyst at Product of the Year South Africa. He is passionate about the various facets of innovation that touch our lives and improve our life’s journey. He contributes the regular column, “Innovator’s Toolkit”, looking at innovation trends and the impact of innovation upon our ability to capture the hearts and minds or consumers, to MarkLives.
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